The movie theater industry may be struggling right now, but Wall Street sentiment may be shifting positively for one company. Cinemark Holdings (NYSE:CNK) stock is in the green today after receiving an upgrade and increased price target.
Analyst Eric Wold of B. Riley Financial recently increased his CNK stock price target from $16 to $27 and upgraded his rating from a “neutral” to a “buy.” Shares are rising today as the company garners momentum from this positive take. And Wold isn’t the only expert who has expressed optimism regarding Cinemark’s growth prospects.
What’s Happening With CNK Stock
Trading has been volatile for CNK stock so far today, with gains of less than 1%. However, shares have been trending upward all year, rising roughly 60% over the past six months. This is a substantially better performance than its chief rival, AMC Entertainment (NYSE:AMC), which is barely in the green for the same period.
AMC has been benefitting primarily from its recently renewed meme stock status. But now there’s reason to believe that Cinemark may be about to top it in that area as well. InvestorPlace contributor Stavros Tousios recently flagged it as a likely meme stock for the coming months but also highlighted its strong financials. As he reports:
“The company recently reported a net income of $25 million and adjusted EBITDA of $71 million with a healthy 12.2% margin. It ended the quarter with $789 million in cash and commitments to open 36 new screens over the next two years while peers outperformed. Management’s solid execution during a challenging environment impacted by strikes could trigger a rush by short sellers to cover their positions.”
Wold isn’t the only Wall Street analyst who sees big things ahead for CNK stock. Mike Hickey of Benchmark kicked off July by reiterating a “buy” rating for Cinemark and a bullish $23 price target. Out of seven surveyed analysts, six currently rate it as a buy, earning it a “moderate buy” consensus. AMC, by contrast, has no buy ratings and currently holds a “moderate sell” consensus.
Why It Matters
Despite operating in a struggling industry, Cinemark routinely proves that it is still a stable investment. AMC may receive more attention from r/WallStreetBets, but CNK stock is getting the right kind of praise, the kind that comes from financial sector experts.
If this bullish sentiment toward it continues to rise, Cinemark will be in an excellent position to continue growing throughout 2024 and beyond. Movie releases and meme stock momentum don’t make a good investment. But as Cinemark has shown, strong financials do.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
